Construction of Singapore's $1.7 billion liquefied natural gas terminal on Jurong Island is ahead of schedule, with 92 per cent of the overall project already completed as at last month, Singapore LNG said.

But it did not give an update of a planned $400 million expansion for another two storage tanks to meet strong user demand including from global gas players.

"SLNG is well placed to complete the terminal, ready for operational start-up by the second quarter of next year," the government-owned terminal developer said on its website.

That is when the first LNG shipments by appointed aggregator or buyer BG Group will arrive, with the LNG helping Singapore - which currently imports piped gas from neighbouring Malaysia and Indonesia to fuel power plants and industries here - to diversify its energy sources.

All key civil works at the terminal will be completed by the end of this month, with steady progress on the initial two storage tanks, SLNG said, adding that "progress on the third LNG tank continues ahead of schedule, and second berth piling works for both jetties and quay wall are progressing well."

The earlier decision to add a third tank - made shortly after the project's initial groundbreaking in March, 2010 - followed stronger-than-expected gas demand from the gencos and industries here. It is expected to be completed by Q1, 2014.

During a site visit in February this year, S Iswaran, Minister in the Prime Minister's Office and second minister for Home Affairs and Trade and Industry, disclosed that SLNG was considering adding a fourth and fifth tank, said to cost a further $400 million, with a decision on this expected within a year.

The move comes as BG Group is expected to reach its franchised LNG volume of three million tonnes per annum by this year or next, with regulator Energy Market Authority currently studying how best to source future LNG supplies after that.

EMA has just closed a three-month industry consultation on this, with the consultation paper stating that the country's huge appetite for gas could also see demand here rising to 15 million tonnes per annum (tpa) by 2024.

Capitalising on the LNG terminal, Singapore's ambition to become a regional LNG trading hub has meanwhile drawn in numerous international players, including LNG producers and traders such as ConocoPhillips and Russia's Gazprom, joining biggies already here like Shell and ExxonMobil.

But EMA said that the limited land available here means that Singapore can have only one LNG terminal in the coming decade.

So even when the terminal, being built at a 40-hectare site, is fully expanded with up to seven storage tanks, it can accommodate up to only four large LNG importers for operational efficiencies, it said.

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